A STRATEGIC APPROACH TO SEPA
Using concept mapping to determine key elements that corporations need to address when approaching SEPA as a strategic challenge
Master Thesis
University of Groningen Faculty of Economic and Business Master of Science, Business Administration
-Organisational and Management Control
INDEX Abstract ... 3 Management Summary ... 4 Introduction ... 6 1. Research Design ... 7 1.1 Problem Statement... 7 1.2 Methodology... 7 1.3 Definition of Strategy ... 10 1.4 Thesis Outline ... 10 2. Context of SEPA... 12 2.1 What is SEPA ... 12
2.2 SEPA Potential Benefits for Society... 15
2.3 SEPA: A Company Perspective... 15
3. Concept Mapping... 19
3.1 Preparation (step 1)... 19
3.2 Generation of Statements (step 2)... 21
3.3 Structuring of Statements (step 3)... 22
3.4 Representation of Statements (step 4)... 23
3.5 Interpretation of Maps (step 5) ... 30
3.6 Discussion and Utilisation of the Results (step 6) ... 33
3.7 Constructing a visual conceptual framework... 34
4. Comparison of the conceptual framework with general change theories ... 36
4.1 Comparison with the framework of Pettigrew... 36
4.2 Comparison with general theories of changing... 38
4.3 Comparison with three recent change process models... 41
4.4 Adjusting the Conceptual Framework ... 43
5. Implementation of the framework in an empirical setting ... 45
5.1 Using the conceptual framework to evaluate the SEPA Survey 2008 ... 45
5.2 Using the conceptual framework to review a SEPA scan... 47
5.3 Adjusting the Conceptual Framework ... 49
6. Conclusion and Discussion ... 51
6.1 Main Conclusion... 51
6.2 Validity of the Research ... 51
7. Bibliography:... 53
8. Appendix ... 57
8.1 Historical Roots of SEPA ... 57
8.2 Elaboration on the most important strategic opportunities of SEPA ... 63
8.3 Reconciliation of 8 SEPA Checklists... 70
8.4 Statements Brainstorm Sessions (in Dutch)... 76
8.5 Final List Statements used in the concept mapping procedure ... 79
8.6 Accompanying Letter in the Sorting Process... 82
8.7 Standardised Bridging Value ... 83
8.8 Results of applying the strategic SEPA Implementation Framework to a SEPA survey... 85
Abstract
Management Summary
The objective of the Single Euro Payments Area (SEPA) is to harmonise the Euro payment market. This study represents the first formal research attempt not only to systematically list the elements that companies need to consider when they approach SEPA in a strategic way, but also to construct a conceptual framework describing the activities that must take place to initiate and carry out successful strategic SEPA implementation. In order to achieve this a three step systematic process was used.
First, the methodology of concept mapping (Trochim, 1989) helped to identify seven key elements that companies need to consider when taking a strategic approach to SEPA. Concept mapping is a type of structured conceptualization which combines the unrestricted perspective of expert participants with information from academic and management literature. Financial experts in the field of treasury rated all seven elements as important in the process. With these elements a conceptual framework was constructed. This framework depicted a basic process that companies could use when approaching SEPA in a strategic way.
In the second phase of the research the constructed conceptual framework was compared to several change models and theories, i.e. Lewin’s Change Model (Lewin, 1947), the Action Research Model (Cummings & Worley, 2001) and the Strategy Formation Activities of De Wit and Meyer (2004). The framework is also compared to the change models of Kotter (1995), Jick (1991b) and Garvin (2000). The conceptual framework appeared to be very much in line with these theories. Besides similarities, three fundamental differences were found. First, in the conceptual framework not only the change process, but also the internal and external communications together with the Human Resource management were found to be important. Second, in the concept mapping procedure, also the strategic aspects of the decision making process were considered to be of paramount importance by SEPA change experts, but much less in the general theories of change. Third, the elements ‘implementing’ and ‘evaluation’ and the broad role of change leadership were absent in the conceptual framework. These findings were used to adjust the conceptual framework.
strategic SEPA implementation. In this case the model proved to be useful, yet incomplete. As in the previous phase, several adjustments were made to the conceptual framework.
This study seeks to understand how companies can effectively approach SEPA in a strategic way. This resulted in an analytic conceptual framework. The framework, to be found in Figure 1, depicts the key elements that corporations need to address when they approach SEPA as a strategic challenge.
The ideal process consist of seven steps, starting with scoping and agenda setting en finishing with data gathering after action. The elements change leadership and communication are important throughout the process. All steps are not to be regarded only sequentially, but as an integrated, iterative process.
Introduction
The Single Euro Payments Area (SEPA) will gradually come into force. The vision of SEPA is to harmonise the Euro payment market. Within the next three years, citizens and corporations in Europe will be able to make Euro payments anywhere within Europe thanks to SEPA as easily as they make national payments.1 SEPA is expected to foster greater transparency and competition, resulting in a cheaper and more efficient payments system in Europe. Involvement of all the parties is a vital requisite for the success of SEPA.
For companies several implementation strategies exist. Some will approach SEPA as a short term compliance issue, yet, also a long-term strategic view is possible where compliance is only viewed as the preliminary part of a much more market-focused project. Companies in the latter category search for new competitive opportunities and increasing revenues through methods which develop and capitalise upon new business initiatives (Fitzgerald, 2008).
Despite these potential benefits market readiness for SEPA is low (Deloitte and Atos Consulting 2008). One of the reasons for this, according to Deloitte and Atos Consulting, is that most companies are unable to build a SEPA business case.
With the final implementation phase of SEPA on the near horizon, it is important businesses know how to approach SEPA in such a way that it benefits their organisation. However, as of yet, no research has been done on this topic. Therefore, the aim of this study is to provide a conceptual framework depicting the key steps companies can take in their strategic preparation and implementation of SEPA solutions in order to fully reap the potential benefits SEPA has to offer.
With the insights gained from literature review, supplemented with the information gained at an internship at Deloitte Financial Advisory Services in Amsterdam, primary data are used to set up a research in the form of concept mapping. Concept mapping (Trochim 1989) is a method that makes extensive use of expert participants in order to create a conceptual framework. Thereafter, the conceptual framework is improved by comparing it to general change theories and applying the model in two empirical settings. These steps result in a conceptual framework depicting the key steps for a strategic SEPA implementation.
1.
Research Design
1.1 Problem Statement
The problem statement is the starting point of the research. This statement can be divided in the goal of the research and the research question (De Leeuw, 2001). The aim of this research is to develop a conceptual framework that can ultimately be used to help meeting the goals of a corporation that want to take a strategic approach to SEPA. This aim closely fits the need corporations Banks and the ECB (European Central Bank) have expressed to enhance the awareness of- and readiness for SEPA in the Euro area.
The research question is:
What is the optimal framework that can ultimately be used to help meet the goals of a corporation taking a strategic approach to the implementation of SEPA solutions?
In order to answer this research question this question is broken down in three sub questions: What key elements must be included in a framework depicting the steps for a strategic
SEPA implementation.
How are these elements related?
What is the best way to depict these elements in a framework considering their
relation to each other?
1.2 Methodology
To develop a conceptual framework the technique of concept mapping is used. In order to test and improve the framework, it is compared to general change theories and applied in two empirical settings.
1.2.1 Concept Mapping
Concept mapping is a type of structured conceptualization which can be used by one or more participants to develop a conceptual framework which can guide evaluation or planning. It is a stepwise approach in which statements are generated, rated, statistically analysed and finally interpreted. Previous studies have used the six steps of Trochim (1989) to define a framework. (1) Preparation (including selection of participants and development of focus), (2) the generation of statements, (3) the structuring of statements, (4) the representation of statements using multi dimensional scaling and cluster analysis, (5) the interpretation of maps and finally (6) the utilization of maps.
The first step of the concept mapping procedure is the preparation. This step describes the context and specifies the goal of the study. Also the group of participants is determined and the focus of the concept map is clarified. In the second step, statements are generated and formulated. There should be at least 30 and no more than 100 statements in a concept map. The third step is the rating of the statements. Each participant in this step has to rate each statement in two ways: first, the statements have to be grouped into internally consistent clusters. Second the priority of each statement has to be given. In step four, the statistical analyses are performed, resulting in a number of statistics and several two-dimensional point and cluster maps. The fifth step is the interpretation. Results in the form of point and cluster maps are discussed and titles and descriptions are given to the different clusters. The sixth and last step of concept mapping is the utilization of the results, e.g. the development of a framework.
Concept mapping is in some respects similar to the cognitive mapping (e.g., Martin, Slemon, Hiebert, Hallberg, and Cummings, 1989). Like cognitive mapping it combines phenomenological and quantitative research strategies and actively involves research participants. However, the two procedures are different in that concept mapping uses open sorting rather than spatial arrangement to clarify relations among concepts, and uses a more thorough qualitative analysis and different statistical analysis than cognitive mapping. (Daughtry & Kunkel, 1993). According to Hoshmand, (1989), concept mapping represents a triangulated combination of, (1) listing and guided inquiry, (2) multidimensional scaling, and (3) cluster analysis, in which qualitative and quantitative analyses are used dialectically (i.e. arriving at the truth by the exchange of logical arguments).
framework. The combinations of these elements make it especially suitable for an exploratory research about a relatively unstudied subject with the aim to conduct a visual framework.
Techniques used within the concept mapping procedure
This technique of concept mapping has the advantage of combining several sources of information. To generate statements within the concept mapping procedure several techniques are used. The first source of information is the knowledge of SEPA expert participants. They perform a number of steps in the concept mapping procedure. Then, to generate statements in step two of the concept mapping procedure, content analysis is performed, empirical data is gathered and structured brainstorming sessions are held.
Content Analysis
The academic literature on SEPA is scarce. Nevertheless, more articles are written about the European Cash Management in general and the introduction of the Euro. Such as de Grauwe (2005), Eichengreen and Wyplosz (2003) Kondonassis and Malliaris (1994) and Grand and Goldberg (2006). These were used to provide a background about SEPA. Most literature related to SEPA was found in trade publications. These were used to get a broader understanding of the research topic. Furthermore, the official SEPA documents produced by the Euro Payment Council (EPC) and EU where used, including the Payment Service Directive (PSD)2, the SEPA Credit Transfer and Direct Debit Rulebooks and different Migration Plans. In addition, a thorough analysis was performed on 8 SEPA checklists issued by banks and other financial institutions. These Checklists where compared, reconciled and double entries were eliminated. The reconciled checklist was used in the second step of the concept mapping process to generate statements.
Empirical findings through the SEPA scan
Deloitte did perform a “SEPA scan” for a Japanese company having its European headquarters based in the Netherlands. This scan consisted of gathering information through interviews and site visits and by studying the process descriptions and blueprints. Thereafter the findings were summarized, and the gap between SEPA requirements and the current state of the organizations was defined. Future state requirements and target performance levels were set. This resulted in an advice to the organisation about what action needed to be taken to become SEPA compliant and benefit fully from the potential SEPA opportunities. These empirical data were collected and used to generate statements in step 2 of the concept mapping process.
Structured Brainstorming session
In addition, two brainstorming sessions with 4 SEPA experts were held to generate statements in the concept mapping process.
1.2.2 Comparison with existing literature
In order to prevent unnecessary mistakes in the conceptual framework resulting from the concept mapping procedure a comparison is made with theoretical change theories. Among others the framework is compared to Lewin’s Change Model (Lewin, 1947), the Action Research Model (Cummings & Worley, 2001), and the Strategy Formation Activities of De Wit and Meyer (2004). The framework is also compared to the change models of Kotter (1995), Jick (1991b) and Garvin (2000). After this comparison the framework is adjusted.
1.2.3 Applying the model in two empirical settings
To test the applicability of the constructed conceptual framework, it is applied to two empirical settings in order to improve it where needed.
1.3 Definition of Strategy
In this research a framework is developed for a strategic SEPA implementation. In order to engage in this task it is important at the outset to specify a working definition of the key term “strategic” as it has varying meanings for different users in different contexts. Most researchers agree that strategies come in all shapes and sizes, and that each strategy is essentially unique. However there is disagreement about the principles to which strategies one should adhere. Yet, the most common distinction between levels of aggregation made in the strategic management literature is between the functional, business and corporate levels (de Wit & Meyer, 2004). This research is aimed at the strategic impact of SEPA, which fits best in the functional aggregation of De Wit and Meyer’s working definition. Therefore in this research strategy is seen as a course of action for achieving an organisation’s purpose, were strategy is referring to questions regarding specific functional aspects of a company, in particular the financial strategy. Within the financial strategy, particularly the role of strategy in the treasury function will be addressed.
1.4 Thesis Outline
2.
Context of SEPA
In this chapter an overview is given of the content and scope of SEPA followed by an overview of the consequences SEPA has for companies. In addition to this chapter, an extensive description of the historical roots of SEPA can be found in appendix 8.1 and the most important strategic opportunities of SEPA can be found in appendix 8.2
2.1 What is SEPA
The Single Euro Payments Area (SEPA) is the area in which citizens, companies and other economic actors will be able to make and receive payments in Euros, within Europe, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location.3 In other words making euro payments throughout Europe will become as easy, cheap and secure as making national payments.
SEPA consist of 31 countries — the 27 EU member states, the three other European Economic Area countries (Liechtenstein, Iceland and Norway) and Switzerland. The SEPA programme is led by the European Payments Council (EPC), which brings together the European banking community and is supported by the European Commission (EC) and the European Central Bank (ECB).
2.1.1 History of SEPA
In 1999 the Financial Services Action Plan (FSAP) was published by the European Commission (EC) and endorsed by the Lisbon Council in 2000. The FSAP represents the European agenda to create an integrated financial marketplace by 2010. One of the key components of the FSAP and the Lisbon Agenda is the Single Euro Payments Area, or SEPA for short.
In order to achieve this goal, in June 2002, the European Payment Council (EPC) was set up. The EPC is recognised as the decision-making and coordination body of the European banking industry in relation to the implementation of SEPA. Its primary purpose is to support the creation of SEPA. The EPC is a self-regulatory body encompassing more than 65 European banks, including the three European credit sector associations and the Euro Banking Association (ECB, 2008). The EPC’s primary deliverables are the development of
SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) ‘Schemes’. These schemes are a set of core inter-bank rules, practices and standards around which banks can compete to offer credit transfer and direct debit products to their customers and potential value-added services at national community level. Furthermore the EPC is responsible for eliminating all technical and contractual provisions, business practices and standards for card schemes to become SEPA-compliant.
2.1.2 Legislation
The Payment Service Directive (PSD) is the necessary legal framework within which all payment service providers will operate. Whereas SEPA is an initiative by the EPC, the PSD is driven by the European Commission (EC). In 2005, after extensive discussions with the various SEPA stakeholders (banks, companies, trade associations and consumers), the EC issued its proposal for the Payments Services Directive (PSD), the underlying legal framework for all payments services. In April 2007 the European Parliament adopted the PSD proposal and the first SEPA-related changes took effect on 28 January 2008.
Figure 2, SEPA; towards a harmonised payment area
2.1.3 Objectives and Vision of SEPA
formats and processes. This will result in phasing out the exclusively national market features and practices which have previously constrained the creation of an open payment market.4 The harmonisation of the European payments will create efficiency gains for society (through economies of scale), drive competition (because there are no technical, legal and ‘business rules’ barriers anymore), and stimulate innovation (e.g. e-invoicing, on-line and mobile payment initiatives, etc.). These points will be discussed in length later.
According to the ECB (2006) the objectives of SEPA include: - Creating an integrated Euro payments environment.
- Ensuring a level playing field for euro payments by removing any differences between national and cross border movements.
- Establishing comparable services with improved efficiencies and service levels. - Facilitating lower cost payment alternatives.
- Encouraging the advancement of related value-added services such as electronic invoicing.
- Supporting the principles of openness and competitiveness in a single market for Europe.
- Promoting EU competitiveness, Euro strength and economic standing within the global market.
These objectives are all part of the SEPA vision where:
Customers will be able to make payments as easily, cheaply and conveniently anywhere within SEPA as they do in their national market
Businesses will be able to undertake their cash management on a SEPA-wide basis and using standardised SEPA-wide processes, platforms and solutions
Payments institutions will more easily be able to offer their propositions, products and services throughout SEPA, which will increase competition and provide customers with more choice and therefore lower prices.
In the following sections the efficiency gains of SEPA for society will be discussed together with the companies perspective on SEPA.
2.2 SEPA Potential Benefits for Society
According to two studies, SEPA will create huge benefits. The first study is done by the ECB (2007) and the second by the EC5 The second study about the costs, benefits and opportunities created by SEPA shows that in the most favourable scenario the net benefits to payments markets over the next six years could amount to as much as 123 billion Euros, with users gaining most. However, this calls for rapid and full migration from existing national payment products to the new SEPA payment instruments. The study also estimates that if SEPA can be used as a platform for e-invoicing there are further potential gains of 238 billion Euros. It must be noted however that in the worst scenario, where neither demand side nor supply side is convinced that the investments needed to make SEPA payments will pay off, SEPA has a potential loss of 43 billion Euros.
The benefits are a result of the economies of scale that can be achieved, more competition and the ability to use SEPA value added services. The integration of national payment systems will produce substantial economies of scale thus lowering payment processing costs. Furthermore, it will also enhance competition by making cross-border competition for payments possible. Together, these will reduce the cost of payments to payment service users. Next to these benefits, companies can also change their way of cash management and benefit from the opportunities to improve their business efficiency. These opportunities and their benefits will be outlined in the next paragraph.
2.3 SEPA: A Company Perspective
The scope of this study is limited to companies that consider a strategic approach to SEPA. The purpose of the next sections is to clarify the alternatives companies have in approaching SEPA and the relevance and current state of the market in adopting SEPA.
2.3.1 Adoption alternatives
Basically companies have a choice to which extent they change their systems and processes when addressing SEPA. The bare minimum for every company is to become SEPA compliant and be able to process SEPA payments, however, to benefit most of the potentials of SEPA a more strategic approach can be chosen. Fitzgerald (2008) describes three approaches to SEPA.
5 Reference to COM IP Press Release on results of Capgemini study: IP/08/98 - Joint
First, addressing SEPA as a short term compliance issue whereby compliance is viewed as a sunk cost and no product differentiation is made.
Second, be a late starter who plays the wait-and-see game and then sprints to catch up. Third, taking a long-term strategic view, which is measured, structured and flexible,
taking compliance as part of the project.
In order to become merely compliant companies need to adapt their ERP systems. Compliance is a state of being in accordance with established guidelines, specifications, or legislation or the process of becoming so. Corporations in European countries have lots of country specific formats in their ERP systems. Therefore the most important challenge companies’ face is the adaptation of their bank connections and ERP systems to new standards. This includes upgrades of software patches, system changes and may even need the change of the whole payment processes.
However, in order to enjoy most of the potential SEPA benefits only adapting the ERP systems may not be enough. SEPA provides the opportunity for fundamental cash management changes. Companies, public administrations, retailers and SME’s can benefit from improved business efficiency and reduced operating costs linked to payments. SEPA makes it possible to conduct all euro payments from a single account at a single location, thus reducing the number of bank accounts and improving liquidity management. Other benefits can be achieved through the opportunity to set up cross-border direct debits in Euros, centralising their payments and using the value added services such as invoicing and e-reconciliation. For more information on these and other strategic opportunities SEPA provides please see appendix 8.2.
This research is aimed at generating a framework for companies taking the third, long term strategic approach. In general, most of the international oriented companies will have the potential of cost savings when SEPA is implemented as they benefit from the increased competition between banks and the possible economies of scale. However, if a company approaches SEPA in a strategic way, more benefits are possible because of the differentiation possibilities of the adoption of SEPA products.
2.3.2 The need versus the current state of market adoption
and consumers) have the most important role to play, for without their co-operation and commitment, SEPA will fail).6
Nevertheless, a European wide survey of Deloitte and Atos Consulting (2008) found that awareness and readiness of companies within the Euro Zone is low. Despite the potential benefits SEPA may provide, many companies are not that advanced with their SEPA implementation as the initiators of SEPA would like to see. This view is supported by Martin Runow, Senior Product Manager at Deutsche Bank. He states in Treasury Today (2008) “We are still seeing very mixed levels of preparedness or even awareness of SEPA in the corporate space.” However, he adds that “This will change as more traffic will be channelled into SEPA over the course of the year”. Also Colin Hemslay, Head of sales from Lloyds TSB, shares this concern “I would say one of the biggest challenges, if not the biggest, is inertia. (...) it’s not unusual for this universe of corporate to greet SEPA discussions with a ‘so what’ response.” Several reasons are mentioned in the literature for this low awareness and consequently for the low implementation rate of SEPA solutions.
The survey of Deloitte and Atos Consultancy (2008) showed that the main reason for not having a SEPA strategy yet is that other projects have a higher priority. Companies have a lot of projects where they can see business opportunities and see a (better) business case. So far, some companies’ state there has been no business case for a quick SEPA implementation, which means there is no internal priority for a SEPA project. This view, however, is in contrast with the study of the ECB (2008) state that SEPA will create (huge) benefits. These benefits not only include passive cost reduction that apply merely by implementing SEPA solutions, but also include benefits only gained by a strategic SEPA implementation. Still, as stated above, some companies doubt this.
Another reason for the low implementation rate mentioned in literature is the lack of communication on this topic between the companies on the one hand, and banks and regulators on the other. Critics state that the project was politically instigated in the first place and that the European Commission (EC) did not ask consumers and companies on the best way to implement SEPA. Now banks are trying to convince the market of the potential benefits but have difficulties in getting the message across. Next to benefits, the banks face the challenge to provide incentives for companies to move across to SEPA.
3.
Concept Mapping
The method of Concept Mapping is used to develop a conceptual framework describing the key elements or conceptual domains that corporations need to address when they approach SEPA as a strategic challenge. Concept mapping consists of 6 steps. These steps will be described in the following sections. In the last section of this chapter, in order to provide an answer to the research question, the first draft of a conceptual framework is constructed.
3.1 Preparation (step 1)
In the preparation step two major topics have to be dealt with. The first is the selection of participants involved in the concept mapping process; the second is the determining of the focus and the scope of the process.
3.1.1 Selecting the participants
The aim was to select a wide variety of relevant people. According to Trochim (1989) the group should be heterogeneous, representing a wide range of views. In this case, CFO’s, practitioners, SEPA consultants and others active in the field of cash management/treasury and SEPA were selected. A broad heterogeneous participation helps to insure that a wide variety of viewpoints will be considered. As a result a broader range of people will find their point of view in the framework.
In the sorting phase of the research a good a mix of professional expertise, types of organizations and cultural backgrounds was guaranteed. Table 1 lists the members with their position and organization. According to Trochim (1989) a relatively small group of between 10 to 20 participants typically seems to be workable enough in concept mapping.
Table 1, Participants in the sorting phase
No. Position Organization
1 Treasurer Accor
2 (ex) Corporate Treasurer Akzo
3 SEPA consultant AtosOrigin
4 SEPA consultant AtosOrigin
5 (ex) Director Corporate Finance Buhrmann
6 Corporate Treasurer Corporate Express
7 SEPA consultant Deloitte
8 SEPA consultant Deloitte
9 CFO Fides B.V.
10 (ex) Corporate Treasurer Hagemeijer
11 General Manager Finance & Administration Hoya Vision Care Europe
12 Head of Finance & Facility LaSer Group
13 Corporate Treasurer Multi Development BV
14 Treasurer Randstad
15 Post Master Researcher SEPA Vrije Universiteit Amsterdam
3.1.2 Focus and scope of the study
The focus for the concept map procedure is to identify the key elements or conceptual domains that corporations need to address when they approach SEPA as a strategic challenge. A focus statement is an open-ended prompt that can be completed. This completion is done in the second step, the generation of statements. The focus statement for this research was: ‘a key element or conceptual domain that corporations need to address when they approach SEPA as a strategic challenge is ...’
3.2 Generation of Statements (step 2)
In the second step of the concept mapping procedure a set of statements is generated. The aim of this step is to generate statements that represent the entire conceptual domain. Several techniques can be used to generate a set of statements related to the focus statement from step one. Therefore the specific assignment was to select all key elements or conceptual domains that corporations need to address when they approach SEPA as a strategic challenge.
In most studies using the method of concept mapping the generation of statements is solely done by brainstorming. However Trochim (1989) indicated that there are many other ways to generate the conceptual domain than brainstorming. In this study several techniques were used to generate statements. The techniques used were literature review, the analysis of the several SEPA checklists, brainstorming and the analysis of empirical data from the reports of a SEPA scan from Deloitte. These techniques are described below:
Literature review: The literature, (academic, trade publications, magazines, etcetera) was
assessed and all items that consisted relevant elements for a corporation to address were written down. Then, double entries and non relevant items were deleted, leaving 25 statements.
SEPA Checklists: In order to assist companies to determine which actions need to be taken to
become SEPA compliant or even better, achieve a competitive advance with SEPA, several banks and other financial institutions designed a SEPA checklist. A thorough analysis was performed on 8 of these SEPA checklists. These checklists where reconciled to one final checklist (see appendix 8.3). This reconciled checklist may be a very helpful tool for a SEPA implementation. The reconciled checklist was used to generate 60 statements. Often checklist-points had to be reformulated, merged or split into several statements to conform to the requirements of a good statement.
Brainstorming: Two brainstorming sessions were held in the form of a structured group
Empirical data from the Deloitte SEPA scan: The data and report of the ‘SEPA scan’ Deloitte
performed (see the methodology section) was used to generate a number of 14 statements. The statements from each of these sources were compiled into one list. 162 statements in total were compiled from the various generations’ techniques. Searching for keywords, similar statements were grouped together. Then, duplicate statements were eliminated, leaving 113 unique sentences for further analysis. Of these, 18 where vague or not to be thought directly relevant, leaving 95 sentences. Through a careful process of stepwise reviewing and reformulating, these 95 statements were merged into 46 unique statements. Hereafter, in a final check by 3 participants, 8 statements were added that were thought to be relevant but completely missed in the former rounds, leaving 54 final unique statements. See appendix 8.5 for the final list of statements used.
3.3 Structuring of Statements (step 3)
Then to 17 selected expert participants each of the 54 statements was mailed and two questions were asked: sort the statements and rate the statements. Please, see appendix 8.6 for the accompanying letter. This process took them about 20 to 40 minutes. In total 15 participants returned the mailing (see Table 1 participants).
3.3.1 Sorting of statements
For the sorting task, each of the 54 statements derived from the qualitative analysis was printed on an 8.4 cm * 4.2 cm card; each card represented a different statement/element that companies could address when they approach SEPA in a strategic way. Participants were asked to place the 54 cards in piles according to "how they seemed to go together." No restrictions were placed on participants’ sorting strategies, other than that they should not place each item card alone in a pile or place all cards in one pile. As Rosenberg and Kim (1975, p490) pointed out, this method has
3.3.2 Rating of statements
The 54 statements from the qualitative analysis were also compiled into a questionnaire, in which participants rated each statement on an equidistant Likert scale. The question was to rate each statement on a 1-to-5 scale where: 1=relatively unimportant; 2=somewhat important; 3=moderately important; 4=very important; 5=extremely important according to how important they thought that the item was to address for a company that approaches SEPA in a strategic way. Together the sorting and rating of the statements took about 30 minutes.
3.4 Representation of Statements (step 4) 3.4.1 Multidimensional scaling of the statements
The data were analysed using Concept Systems software, a statistical software package for the analyses of group and priority data of concept mapping procedures. The statistical technique of multidimensional scaling (MDS) is performed on the card-sort data to suggest statistically and visually the organizational principles implicit in participants' sorting (Davison, Richards, and Rounds, 1986). See Figure 3.
Figure 3, MDS of the sorted statements
3.4.2 Stress value
The stress value for the MDS two-dimensional solution was 0.25. According to Trochim (1989), a value of less than .30 represents a stable MDS solution, whereas a stress value over 0.40 indicates an unstable solution. This heuristic was supported by a subsequent meta-analysis (Trochim, 1993) that found, across 33 concept mapping studies, that the average stress value was 0.29 (standard deviation = 0.04). This standard is considerably higher than standard conventions for MDS, which define adequate fit as ≤ 0.15 (Stalans, 1995). However, it must be remembered that this recommendation is premised on research with more stable phenomenon (e.g., physiological perceptions of colour similarities), fewer entities, and more precise measurement methods (e.g., paired comparisons) (Trochim, 1993).
3.4.3 Number of clusters
Cluster analysis is used to identify conceptually similar groups of sorted items (Borgen and Barnett, 1987). Two decision-making tools were used to decide how many clusters were most suitable. The first was the average number of piles selected by participants and the second was the average cluster bridge value. Participants sorted the statements into an average of about 5 piles (average = 5.27, standard deviation = 2.0). Because the average number of piles used by participants was 5.27, a number of 5-, 6-, and 7-category solutions, which fall within about 1 standard deviation from the mean, were considered most in line with participant conceptualizations. In addition, examining interpretability, starting with a 10-cluster solution in decreasing order, it was noted that participant labels for the clusters became less comprehensible after the 7 cluster solution. The second tool used to decide how many clusters were most suitable is the average bridging value (more information on bridging values can be found in paragraph 3.4.6). The mean cluster bridging value for a 7-cluster solution was slightly smaller (average = 0.38) than the other average cluster bridging values. On the basis of these two used heuristics, a 7 cluster solution was selected.
3.4.4 Labelling the clusters
constituent items. Then the group met once again to reach consensus about a descriptive and justifiable name for each. The labels that best described the statements in the cluster under consideration where selected.
Seven clusters categories for companies taking a strategic approach to SEPA were identified:
Cluster 1: HR and Internal Communication, Cluster 2: Scoping and Planning, Cluster 3: External Communication, Cluster 4: Acquiring SEPA Information, Cluster 5: Analysing SEPA Impact, Cluster 6: Strategic Decisions, Cluster 7: IT/ERP and BIC/IBAN Changes
3.4.5 Map Construction
Figure 4 depicts the concept map with the 54 elements that companies can address when they approach SEPA in a strategic way, based on multidimensional scaling and cluster analysis of 15 participants open-card sorts of these elements, derived from qualitative analysis. This map combines the MDS plotted coordinates, the cluster solution, and the selected category labels in pictorial format.
Each cluster represents distinct conceptual areas that experts in the payments industry identified as a key element for a company to consider when it takes a strategic approach to SEPA. Statements within each cluster therefore fit together statistically—and conceptually.
Because distance is an indicator of conceptual similarity, categories falling closer together in Figure 4 are conceptually more similar. For example, according to the participants in this study, the cluster ‘Acquiring SEPA Information’ is understood as being more similar to the categories ‘Analysing SEPA Impact’ and ‘Strategic Decisions’ than it is to the category ‘HR and Internal Communication’. The size of each cluster does not reflect importance or strength. One cluster is not more important or stronger than another because of its size.
The statement composition of each categorical cluster is presented in Table 2.
Table 2, Statement Composition of Each Cluster
Nr. Cluster Importance
Rating Cluster 1: HR and Internal Communication
1 Train employees on how to effectively use SEPA and the new SEPA tools 3,29 53 Get the plans approved by management (with the support of the HR
department) and worker's council('s) 3,21
52 Make sure that all internal communications about the change process are
done in a professional and timely way 3,07
19 Change the culture to become ‘SEPA minded’ 3,07
51 Have a good picture of all personnel consequences 2,57
Cluster 2: Scoping and Planning
3 Design an action plan regarding the introduction of SEPA 4,07
47 Set out a SEPA strategy 3,79
6 Appoint a project manager or project team to coordinate the activities
related to the introduction of SEPA 3,50
38 Acknowledge that SEPA changes the cash management environment 3,36 12 Draw up a financial budget for the introduction of SEPA 2,86 41 See if it is possible to switch collectively with the entire industry or value
chain to SEPA standards (to enhance communication, compliance and
efficiency) 2,29
40 Hire an independent (SEPA) change expert in order to facilitate internal
acceptance of the measures to be taken 2,21
Cluster 3: External Communication
13 Communicate the BIC IBAN to all external relations where appropriate 4,00 42 Inform customers about the change to SEPA Direct Debit (i.e. general
conditions, additional mailing regarding the changes etc.) 3,57 31 Make sure that business partners update their systems with your
International Bank Account Number (IBAN) and Bank Identification Code
(BIC) 3,29
27 Communicate SEPA plans to the affected business areas and banks 3,21
Cluster 4: Acquiring SEPA Information
Identification Code (BIC) from business partners and staff
34 Find out the latest deadline for the use of the current bank account numbers and the current transfer methods per country as the migration plans differ
per country 3,57
39 Conduct a cost/benefit analysis of switching from domestic payments to
SEPA payments 3,29
15 Collect official SEPA documents and ensure to have all relevant
information before implementing SEPA. 3,29
7 Make an overview of the bank accounts in specific countries 3,14 44 Evaluate the tax consequences of all the changes following the SEPA
implementation (in process, bank accounts etc…) 3,00
50 Make an inventory of the countries of all customers and beneficiaries and
assess the SEPA impact (‘SEPA countries’?) 3,00
Cluster 5: Analysing SEPA Impact
10 Identify the changes that have to be made to receive Credit Transfers and
process Direct Debits 4,07
2 Be prepared for incoming flows by means of SEPA credit transfers 3,57 22 Review the general conditions and terms and conditions of sale of payment
conditions/methods taking into account SEPA regulations 3,57 23 Assess the impact for liquidity management as a result of the SEPA
payment cycles 3,43
33 Assess in which way the new refund period of direct debit (6 weeks + 2
weeks processing time) is having an impact on current credit management 3,43 28 Assess what payments could be switched to SEPA Credit Transfers 3,43 45 Identify the need to change the client approval for Direct Debit, in order to
comply with the ’SEPA Direct Debit mandate rules’ 3,29
26 Assess the impact of changing to the SEPA Credit Transfers 3,21 11 Describe the whole process of cash management in order to assess the
influence of SEPA on this process. 3,14
35 Assess the impact of changing to the SEPA direct debit 3,08 36 Make an inventory of the documents/procedures used, that will be affected
by SEPA 3,07
17 Describe the process of Purchase to Pay and Order to Cash in order to
assess the influence of SEPA on these elements 3,07
18 Assess what income payments can be switched to direct debit 3,00 37 Make an inventory of all the cash inflows and check if they can be
switched to Direct Debits 3,00
20 Assess the influence of SEPA on foreign exchange management 2,71
Cluster 6: Strategic Decisions
30 Assess what processes, when changing to SEPA, can be made more
efficient 3,64
5 Consider the possibility of automatic reconciliation with the new SEPA
standards 3,43
16 Assess where it is possible to automatise the cash management process in
relation to SEPA (increase Straight Through Processing rate) 3,29 49 Consider the change of cash management as an opportunity to centralise
21 Determine whether opportunities arise because of SEPA (e.g. new markets,
cross border direct debit) 3,21
14 Consider reducing the number of bank accounts 3,21
32 Consider the Handling of reject code information (This is a feature of the SEPA Credit Transfer Scheme. Consideration should be given to the
handling of these error codes in an automated manner) 3,07 4 Assess if this is a good opportunity to change the software package (ERP
package) 2,86
43 Asses if E-invoicing becomes a realistic possibility 2,86 25 Consider the option of outsourcing cash management 1,93
Cluster 7: IT/ERP and BIC/IBAN Changes
54 Contact the IT provider to determine how the (ERP) software will be
affected by the changes planned for SEPA 3,64
24 Make an inventory of all software and files where the name of the bank
(BIC) and account number (IBAN) are mentioned 3,64
48 Ask the banks what processing solutions they offer, such as accepting the
existing payment formats 3,57
46 Decide whether or not to switch to the ISO 20022 XML format (the SEPA
standard) 3,50
29 Determine the consequences for the interface between ERP and electronic
banking software 3,43
8 Decide when to phase out non-SEPA payments (for example cheques) 2,93
3.4.6 Bridging values
The average bridging value for each category represents how similar participants understood each category. The standardised cluster bridging value ranges from 0 to 1. It mathematically indexes the average of how often statements within a particular cluster were sorted with other statements that are close to them on an MDS plot compared with those statements further away on this plot (Concept Systems Inc., 2003). The formula personally provided by Trochim (2004) is available in Appendix 8.7: Standardised Bridging Value. Lower cluster bridging values indicate that the statements within this cluster were not commonly sorted with statements from other clusters. So, clusters with lower values represent categories of greater conceptual homogeneity across participants. That is, a category with a high bridging value has more varied meaning for different participants, whereas a category with low bridging value is understood more similarly across participants.
Table 3, Bridging values for each cluster; CI: confidence interval
Cluster Bridging Value (95% CI)
Cluster 5: Analysing SEPA Impact .15 (0.00 – 0.39)
Cluster 6: Strategic Decisions .21 (0.00 – 0.55)
Cluster 4: Acquiring SEPA Information .30 (0.04 – 0.56)
Cluster 2: Scoping and Planning .44 (0.10 – 0.78)
Cluster 3: External Communication .57 (0.52 – 0.62)
Cluster 7: IT/ERP and BIC/IBAN Changes .70 (0.38 – 1) Cluster 1: HR and Internal Communication .87 (0.64 – 1)
3.4.7 Rating
The average rating of importance of each category, as understood by participants, was calculated by taking the average rating of importance that participants provided to the statements within each category, which is presented in Table 4. Noticeable is that the differences between the clusters are small. The cluster of statements rated on average as the most important group of elements is External Communication (cluster #3), with a mean importance rating of 3.52 and ratings ranging from 3.21 to 4.00. The second cluster of statements rated on average as the most important is IT/ERP and BIC/IBAN Changes (cluster #7) with a mean importance rating of 3.45 and ratings ranging from 3.3 to 4.6.
Table 4, Clusters are listed in order of importance based on mean rating; CI: confidence interval. Statements within each category were rated for importance on a 5-point Likert-type scale in which 1 = not important, 2 = slightly important, 3 = moderately important, 4 = very important, and 5 = extremely important.
Cluster Mean (95% CI)
Cluster 3: External Communication 3.52 (2.91 – 4.12) Cluster 7: IT/ERP and BIC/IBAN Changes 3.45 (2.97 – 3.94) Cluster 4: Acquiring SEPA Information 3.36 (2.58 – 4.13)
Cluster 5: Analysing SEPA Impact 3.27 (2.65 – 3.89)
Cluster 2: Scoping and Planning 3.15 (1.84 – 4.46)
Cluster 6: Strategic Decisions 3.07 (2.20 – 3.94)
3.5 Interpretation of Maps (step 5)
To get a better understanding of the maps a short description of each of the clusters will be given. Subsequently, using the principles of dimensions in a MDS the clusters are ordered in a logical way. To increase the practical use of the outcomes of the concept map, a visual conceptual framework is generated.
3.5.1 Description of the main ideas in each cluster of the map
To get a better understanding of the clusters a description of the main ideas in each cluster is given.
Cluster 1: HR and Internal Communication
Internal Communications and Human Resource is mostly about communication in the change process. For example, higher management need to give approval, support is needed from the HR department and worker’s council, a good picture is needed of all personnel consequences and when changing the culture to become more SEPA minded employees need to understand the change and need to be trained how to effectively use SEPA and the new SEPA tools.
Cluster 2: Scoping and Planning
Before starting to implement any SEPA solutions, planning, and scoping are important elements. In this phase considerations should be given on appointing a project manager, setting out a SEPA strategy, drawing up a financial budget and designing an action plan regarding the introduction of SEPA.
Cluster 3: External Communication
Cluster 4: Acquiring SEPA Information
Acquiring SEPA information is an important step in the process. Three different kinds of data need to be gathered. 1) External SEPA information, 2) affected internal processes and, 3) BIC and IBAN numbers.
Firstly all relevant external SEPA information needs to be acquired. For example, the collection of official SEPA documents to ensure to have all relevant SEPA information and finding out the latest deadline for the use of the current bank account numbers and the current transfer methods per country (as the migration plans differ per country).
Second, data needs to be gathered on the relevant processes that will be affected by SEPA such as an overview of the bank accounts in specific countries, file formats used and an overview of all customers in different SEPA countries.
Third, all BIC and IBAN numbers from business partners and staff should be collected. Because of the time constraint most companies will have when changing to SEPA, it is really important to start with the collection of BIC and IBAN numbers early in the process. Many companies foresee this collection of BIC and IBAN as a major difficulty (GT News, 2008).
Cluster 5: Analysing SEPA Impact
Analysing SEPA Impact encompasses all assessment activities of the impact of SEPA. For example, the identification of changes that have to be made to receive SEPA credit transfers and process SEPA direct debits, the impact on liquidity management as a result of SEPA payment cycles, an assessment on what payments could be switched to SEPA credit transfers and what cash inflows could be switched to SEPA direct debit. But also the broader analysis of describing the whole process of cash management in order to assess the influence of SEPA on this process and making an inventory of the documents/procedures used, that will be affected by SEPA.
The level of impact SEPA will have on a company will depend on a combination of factors including the nature of its business, its payment volumes, its current payment and collection arrangements including the systems and instruments used, and whether operations are centralised or decentralised.
Cluster 6: Strategic Decisions
given to the opportunity to increase Straight Through Processing through the centralisation of payments, the automatic reconciliation of payments and/or the possibility of E-invoicing. Furthermore, the option of outsourcing the cash management function could be considered and considerations could be given to the possibility to reduce the number of banking accounts. Last of all, considerations could be given to whether (external) opportunities arise because of SEPA, e.g. new markets, cross border direct debit etc. This cluster is very important for companies that approach SEPA in a strategic way. An extensive elaboration on the each strategic aspect and its opportunities and implications for companies can be found in appendix 8.2.
Cluster 7: Assessing IT/ERP and BIC/IBAN Changes
The last cluster consists of all relevant aspects relating IT and ERP considerations, both the preliminary analysis of changes and a decision phase. The analysis includes for example: contacting the IT provider to determine how the (ERP) software will be affected by the changes planned for SEPA, determining the consequences for the interface between ERP and electronic banking software and making an inventory of all software and files where bank (BIC) and account number (IBAN) are mentioned. The decision phase includes, among others, the decision whether or not to switch to the ISO 20022 XML format (for more information see appendix 8.2.7) and the decision when to phase out non-SEPA payments.
3.5.2 Interpreting and ordering
To get a better understanding of the map it is important to understand dimensions in Multi Dimensional Scaling (MDS). Dimensions are item attributes that seem to order the items in the map along a continuum. A clear explanation on how to interpret dimensions in an MDS is given on the Analytic Technologies (2008) website. “An MDS of perceived similarities
among breeds of dogs may show a distinct ordering of dogs by size. The ordering might go from right to left, top to bottom, or move diagonally at any angle across the map. At the same time, an independent ordering of dogs according to viciousness might be observed. This ordering might be perpendicular to the size dimension, or it might cut a sharper angle”.
Cluster 2: Scoping and Planning
Cluster 4: Acquiring SEPA Information Cluster 5: Analysing SEPA Impact Cluster 6: Strategic Decisions
Furthermore, two clusters can be found on communication. These are important throughout the implementation process:
Cluster 1: HR and Internal Communication Cluster 3: External Communication
The last cluster, Cluster 7: IT/ERP and BIC/IBAN Changes is a special one to interpret. The items included seem to be more often sorted together on their distinction of being IT related than on their process factor. Although there are some statements with action points in this cluster, the similarity in this cluster is not a process factor (such as scoping and planning), but on their type of describing IT related matters. This may imply that the participants thought of this matter as important enough to make this distinction on content rather than on process. This importance is also reflected in the fact that it is rated as the second most important cluster.
All in all, four process clusters, one content cluster and two communication/HR clusters were distinguished.
3.6 Discussion and Utilisation of the Results (step 6)
The seven clusters of the concept map and the ranking of the clusters are the final results of the concept mapping procedure. They are the critical elements for companies to consider when taking a strategic approach to SEPA.
According to Trochim (1989) this concept map can be useful for planning purposes and later for evaluation purposes. First as a planning tool, the results of this concept map can be used for the outline of a SEPA implementation planning report. The clusters in the concept map can be used as outline and the individual statements could be subheaded to the clusters. Thus for planning SEPA implementation, the concept map provides a framework for understanding the important issues in a way which enables sensible pictorial and outline representations. Second, the concept map is also useful in evaluation contexts. Especially when the concept map is also used in the planning phase, the concept map can act as an organising device for operationalising and implementing the program. The implementation of SEPA solutions can be designed around the clusters and the concept map can form the basis of a process
evaluation. Each cluster can be viewed as a measurement construct and the individual statements can suggest specific operationalisations of measures within constructs.
3.7 Constructing a visual conceptual framework
The goal of this research is to construct a conceptual framework. Constructing a visual conceptual framework, other than the concept map, is not a standard step in the concept mapping process. However, to attain a better understanding and to increase the practical use of the concept map a conceptual framework is constructed using the generated clusters in the concept mapping procedure.
Key findings of this chapter
As discussed in the former paragraph, four process clusters were distinguished, two communication/HR clusters and one specific content cluster.
Constructing the framework
It was a challenge to combine the process elements with other elements in one model. It is important to note that this step is depended on the researcher interpretation. The constructed
4.
Comparison of the conceptual framework with general
change theories
The seven clusters of the concept map and the ranking of the clusters are the final results of the concept mapping procedure. They are the critical elements for companies to consider when they take a strategic approach to SEPA. In order to prevent unnecessary mistakes in the construction of a conceptual model based on these elements, a comparison is made between the clusters resulting from the current study and those made in different (change) theories. In order to structure this chapter it is divided in four sections. The first section will discuss the model of Pettigrew and compare it with the generated clusters of the concept map. In the second part of this chapter a comparison is made between the conceptual framework and some general change models and in order to provide a thorough analysis, in the third section the model is compared to some recent change models. Finally, in the last section the constructed conceptual framework is redesigned using the findings of this chapter.
4.1 Comparison with the framework of Pettigrew
In most general change models only process factors are addressed, in the constructed framework also other factors are found. Therefore, before starting to compare the model with existing change models it is the intent of this paragraph to attain a better understanding of the different type of factors found in the conceptual framework.
To attain a better understanding of this different type of factors the conceptual framework is compared to the framework of Pettigrew (1985a, 1985b). The starting point of the framework of Pettigrew is the notion that formulating the content of any strategy for change entails managing its context and process. According to Pettigrew, theoretically sound and practically useful research on change should involve the continuous interplay between ideas about the
context, the process, and the content of change together with skill in regulating the relations
Figure 7, Outline Analytical Approach to Change (Pettigrew & Ferlie 1988)
In order to make this comparison each of the three ideas will we tested against the constructed conceptual framework.
Content refers to the particular area or areas of transformation under study (Pettigrew &
Ferlie, 1988). The areas under study are all related elements that companies can consider when they take a strategic approach to SEPA. According to Pettigrew, formulating this content entails managing its context and process.
Analytically the context of any change is divided into outer and inner context (Pettigrew & Ferlie 1988). Outer context refers foremost to the SEPA regulations, e.g. the Payment Service Directives (PSD), the political context of the European Payment Council (EPC) and the European Commission, but also the supply chain and several stakeholders. These context factors are addressed in the constructed conceptual framework. The cluster ‘Acquiring SEPA Information’ addresses the outer context because it entails collecting all relevant SEPA documents and regulations. Furthermore, the cluster ‘External Communication’ is directed at the external stakeholders. Also, in the cluster ‘Strategic Decision Making’ an important statement is the assessment of the possibility to adopt SEPA standards throughout the supply chain.
Furthermore, the ‘Analysing SEPA Impact’ phase is also directed to obtain inner context information. One can think about the gathering of data about all relevant processes, for example.
The process of change refers to the actions, reactions, and the interactions of the various interested parties as they seek to move the company from its present to its future state. The process elements in the model are represented by the four process steps in the generated model. They refer to the first actions that should be taken by a company that approaches SEPA in a strategic way. However, the model may be interpreted as linear whereas Pettigrew states that it is the reliance placed by conventional approaches on highly rational and linear theories of process to drive their models which limits their explanatory power and value as a guide to action.
Taken as a whole, all elements Pettigrew describes that a minimum theoretically sound and practically useful research should include are also found in the conceptual framework. Furthermore, within the process elements, the fact that the change process is depicted as only being linear may limit the value as a guide to action. This can be a subject for improvement. The next step is to establish how well the framework describes the change process using general change models as a benchmark.
4.2 Comparison with general theories of changing
Conceptions of planned change have tended to focus on how change can be implemented in organisations (Bennis, 1966). Called “theories of changing,” these frameworks describe the activities that must take place to initiate and carry out successful organizational change. In this section five theories of changing will be described and in order to test the construction of process factors in the constructed conceptual framework, a comparison is made between the process clusters resulting from the current study and those made in the general theories of changing.
& Worley (2001) these models suggest a general framework for planned change. This general framework describes the four basic activities that practitioners and organisation members jointly carry out in organisations development. Another approach to the strategic change process is taken by De Wit & Meyer in their ‘aspects of the strategy process’. In this model a split is made between strategy analysis, the strategy formulation stage and the strategy implementation stage. De Wit & Meyer (2004) also provide the strategy formation activities model. In this model the change process could be divided into four general categories of activities – identifying, diagnosing, conceiving and realising. These elements can be further divided into eight basic building blocks of the strategy formation process.
Table 5 shows the relationships between the clusters of the concept map and the different change models. It must be noted that the table is put together without the arrows and directions found in the models. Furthermore, the models are put side to side in order to compare them. The comparison and especially the attempt to level the steps that fit together are bound to be subjective to the view of the researcher. Yet, despite these limitations of the table, it is very useful to compare the clusters of the concept map with the different models.
Table 5, concept map and general models of change
Concept Map Lewin’s
Change Model (1947) Action Research Model General Model of Planned Change Aspects of the strategy process Strategy Formation Activities
(De Wit & Meyer, 2004)
Problem
Identification Strategic Thinking
1. Scoping and
Planning Consultation with
behavioural science expert
Entering and
Contracting Strategy Formation
Identifying
(mission and agenda setting)
2. Acquiring SEPA Information
Data gathering and preliminary diagnosis 3. Analysing
SEPA
Impact Feedback to key client or group Diagnosing
Diagnosing
(external and internal assessment) In te rn al an d E xte rn al C om m un ic ati on 4. Strategic Decisions Unfreezing Joint diagnosis of problem Conceiving
(option generation and option selection) Movement Action Planning and Implementing Change Strategic Change Realizing
(action taking and performance control) Refreezing Data Gathering after Action
